Tesco is facing Britain's largest ever equal pay claim and a possible compensation bill of up to 4 billion pounds (C$7 billion), according to a law firm which has begun legal proceedings. It comes as a campaign for equal pay grows in the U.K.

Saudi Arabia to launch wage monitoring system

Government hopes to boost participation of Saudi citizens in workforce, keep track of foreign workers

By Ibrahim al-Mutawa

02/27/2012|hrreporter.com|Last Updated: 02/27/2012

RIYADH (Reuters) — Saudi Arabia will launch a system in the next three months to monitor wage payments to company employees, part of efforts to boost the participation of Saudi citizens in the workforce and keep track of foreign workers, the labour minister said on Monday.

In an interview with Reuters, Adel Fakieh stressed this and other steps taken by the ministry were not designed to slash the size of Saudi Arabia's huge foreign workforce, and the government did not plan drastic reductions in the number of visas issued to foreign workers.

Instead, he said, the government aimed to cut unemployment among Saudi citizens, now about 10.5 per cent, and to boost the number of Saudi citizens employed in the private sector by 50 per cent over the next three years.

"The main objective is to recruit Saudis and Saudi women — reducing foreign labour is not an end in itself," he said. "Our country is growing at very fast rates and there are huge and historic projects... reducing foreign labour is not a goal because it would affect the speed of implementation of development programmes in the kingdom."

He added, "We have no objection to issuing more visas if this does not affect the availability of career opportunities for our sons."

Decades of oil-fuelled growth have distorted Saudi Arabia's jobs market. About eight million foreign workers have been brought in to fill jobs in the oil sector, retail and manufacturing businesses, and other areas which Saudis are unwilling or unqualified to perform.

At the same time, unemployment is high among the estimated 16 million Saudi citizens, who account for only about 10 per cent of private sector employment. As the country's young population ages, this threatens to become a serious economic problem, and last year's social unrest in the Arab world showed it could also become a political threat.

The government has responded with employment bureaux, job subsidies and regulations to push private sector companies into hiring more Saudi citizens instead of foreigners. A scheme launched last year penalizes firms if they fail to reach minimum ratios of Saudis in their workforces and rewards them if they greatly exceed those targets.

The new wage monitoring system, designed in co-operation with other official agencies such as the central bank, will check that monthly salaries paid to Saudi and expatriate employees are paid into their bank accounts in line with the terms of their employment contracts.

"In the first phase it will be applied to large companies; this will be within two months or three at the latest," Fakieh said, adding that smaller firms would be brought in gradually and a full range of firms would be monitored in a year.

In the long term, the system will help the ministry introduce a scheme under which companies will be rated by authorities not only according to the ratios of Saudi citizens in their workforces, but also based on the proportions of their payrolls being paid to Saudi citizens, he said.

The new scheme is intended to encourage companies to appoint Saudis to higher and better-paid positions. Fakieh did not specify when it might be introduced.

The minister said the results of recent efforts to boost Saudi employment had been excellent, but did not give details. He expressed concern, however, at latest data for unemployment benefits which showed a high proportion of women among the unemployed. According to official figures from 2009, women make up almost one-half of all Saudis listed as looking for work.

As part of cautious efforts to encourage the employment of women, Saudi King Abdullah ordered last year that lingerie shops should have exclusively female staff.

"We believe that the retail sector is the biggest sector that will be able to employ a large number of women," Fakieh said, adding that the government would also take steps to promote the employment of women in factories and at home.